Exam Prep
Table of
Table of Contents
Content
Introduction.................................................................................................................................................4
What is Company Law?............................................................................................................................4
s
Corporate Law v Business Law.................................................................................................................5
Which legal Frameworks?........................................................................................................................6
Business Forms........................................................................................................................................8
Types of Business formats...................................................................................................................9
The Company and its core characteristics.................................................................................................12
Purpose of Companies...........................................................................................................................12
Company Characteristics.......................................................................................................................13
Legal personality................................................................................................................................14
Limited Liability..................................................................................................................................15
Transferable shares...........................................................................................................................15
Delegated management....................................................................................................................16
Shared ownership..............................................................................................................................17
Public Company vs. Private Company....................................................................................................17
Shareholders role & Corporate Organ Interrelationships..........................................................................20
Shareholders..........................................................................................................................................20
Terminology.......................................................................................................................................20
Who can be a shareholder?...............................................................................................................21
Functions of a shareholder................................................................................................................22
Shareholders’ rights and duties.............................................................................................................22
Shareholders voting and the general meeting of shareholders.............................................................24
Shareholders vote on shareholder resolutions..................................................................................24
Shareholders vs. Directors.....................................................................................................................25
Director primacy................................................................................................................................26
Shareholder primacy..........................................................................................................................26
Incorporation and Establishment..............................................................................................................28
, Defining Company or Corporation.........................................................................................................28
Legal personality theories......................................................................................................................28
Public and Private Companies................................................................................................................29
Legal Theory of Company Law...............................................................................................................30
Corporate Legal Origin Theory...............................................................................................................30
Incorporation and Establishment..........................................................................................................31
Constitutional Documents.....................................................................................................................34
Right to Establishment...........................................................................................................................36
Directors....................................................................................................................................................38
Directors of a Company.........................................................................................................................38
POWERS OF THE MANAGEMENT BOARD..............................................................................................39
Who can be a Director?.........................................................................................................................39
The Organization and Structure of Boards.............................................................................................41
Appointment of Directors......................................................................................................................43
Removal of Directors.............................................................................................................................44
Power of Representation.......................................................................................................................45
Principle-Agent Relationship..................................................................................................................47
Duties of Directors.....................................................................................................................................48
To whom are the duties owed?.............................................................................................................48
Company’s interest................................................................................................................................48
Directors’ duties....................................................................................................................................48
Duty of care.......................................................................................................................................49
Duty of Loyalty...................................................................................................................................49
The Statutory Duties..............................................................................................................................49
Duty to avoid conflicts of interest......................................................................................................51
Duties of directors in Insolvency............................................................................................................52
Directors liability....................................................................................................................................53
Insolvency, Winding-up and Dissolution....................................................................................................55
Lifecycle Company.................................................................................................................................55
Insolvency..............................................................................................................................................58
Types of winding-up..............................................................................................................................59
Settling Company’s debts and selling the assets....................................................................................63
,
, Week 1
Introduction
There are legal and natural persons.
Companies are legal persons.
What is Company Law?
Why study it?
o influential role society, economies
o understand dynamics (int’l) business activities
o (intl) commercial transactions
o (intl) trade, free market neo-liberalization & globalization
It is important because…
o Company law regulates companies and the environment which they
move, i.e capital markets
Regulates company organizational structure for business
Terminology
o Company or corporations – differences
For the purpose of this course: used Interchangeably
Company –
From late Latin companio, literally "bread fellow,
messmate,
com "with, together" + panis "bread”
mid-12c. Old French compagnie
o "society, friendship, body of soldiers", large group
from late 13c. Sense of "business association" first
recorded 1550s, having earlier been used in reference to
trade guilds (c. 1300)
Table of
Table of Contents
Content
Introduction.................................................................................................................................................4
What is Company Law?............................................................................................................................4
s
Corporate Law v Business Law.................................................................................................................5
Which legal Frameworks?........................................................................................................................6
Business Forms........................................................................................................................................8
Types of Business formats...................................................................................................................9
The Company and its core characteristics.................................................................................................12
Purpose of Companies...........................................................................................................................12
Company Characteristics.......................................................................................................................13
Legal personality................................................................................................................................14
Limited Liability..................................................................................................................................15
Transferable shares...........................................................................................................................15
Delegated management....................................................................................................................16
Shared ownership..............................................................................................................................17
Public Company vs. Private Company....................................................................................................17
Shareholders role & Corporate Organ Interrelationships..........................................................................20
Shareholders..........................................................................................................................................20
Terminology.......................................................................................................................................20
Who can be a shareholder?...............................................................................................................21
Functions of a shareholder................................................................................................................22
Shareholders’ rights and duties.............................................................................................................22
Shareholders voting and the general meeting of shareholders.............................................................24
Shareholders vote on shareholder resolutions..................................................................................24
Shareholders vs. Directors.....................................................................................................................25
Director primacy................................................................................................................................26
Shareholder primacy..........................................................................................................................26
Incorporation and Establishment..............................................................................................................28
, Defining Company or Corporation.........................................................................................................28
Legal personality theories......................................................................................................................28
Public and Private Companies................................................................................................................29
Legal Theory of Company Law...............................................................................................................30
Corporate Legal Origin Theory...............................................................................................................30
Incorporation and Establishment..........................................................................................................31
Constitutional Documents.....................................................................................................................34
Right to Establishment...........................................................................................................................36
Directors....................................................................................................................................................38
Directors of a Company.........................................................................................................................38
POWERS OF THE MANAGEMENT BOARD..............................................................................................39
Who can be a Director?.........................................................................................................................39
The Organization and Structure of Boards.............................................................................................41
Appointment of Directors......................................................................................................................43
Removal of Directors.............................................................................................................................44
Power of Representation.......................................................................................................................45
Principle-Agent Relationship..................................................................................................................47
Duties of Directors.....................................................................................................................................48
To whom are the duties owed?.............................................................................................................48
Company’s interest................................................................................................................................48
Directors’ duties....................................................................................................................................48
Duty of care.......................................................................................................................................49
Duty of Loyalty...................................................................................................................................49
The Statutory Duties..............................................................................................................................49
Duty to avoid conflicts of interest......................................................................................................51
Duties of directors in Insolvency............................................................................................................52
Directors liability....................................................................................................................................53
Insolvency, Winding-up and Dissolution....................................................................................................55
Lifecycle Company.................................................................................................................................55
Insolvency..............................................................................................................................................58
Types of winding-up..............................................................................................................................59
Settling Company’s debts and selling the assets....................................................................................63
,
, Week 1
Introduction
There are legal and natural persons.
Companies are legal persons.
What is Company Law?
Why study it?
o influential role society, economies
o understand dynamics (int’l) business activities
o (intl) commercial transactions
o (intl) trade, free market neo-liberalization & globalization
It is important because…
o Company law regulates companies and the environment which they
move, i.e capital markets
Regulates company organizational structure for business
Terminology
o Company or corporations – differences
For the purpose of this course: used Interchangeably
Company –
From late Latin companio, literally "bread fellow,
messmate,
com "with, together" + panis "bread”
mid-12c. Old French compagnie
o "society, friendship, body of soldiers", large group
from late 13c. Sense of "business association" first
recorded 1550s, having earlier been used in reference to
trade guilds (c. 1300)
